The big question: Is this a giveaway to HMOs and HMOs only? Probably not – at least in the short term.

The bill puts nearly all 3 million Medicaid recipients into managed care, but it specifies that doctor and hospital networks and so-called “accountable-care organizations” can compete.

The managed-care groups will negotiate with the state to provide service in any number of 11 regions. The number of plans will be capped in each region, though each region has a guaranteed PSN/hospital network slot that, for two years, can receive slightly higher payments for handling patients.

But, because the number of providers is capped in each region and because they get an across-the-board 5 percent rate cuts, there’s a good chance that plans will operate at a loss in the first year. And only the big boys can handle a hit like that in the short-term in order to have long-term profits from the $22 billion program.

Democratic leader Nan Rich of Weston said the little guys (a relative term in Medicaid) will be squeezed out.

“They are not going top be able to compete with an HMOs,” she said

Rich heaped personal praise on Sen. Joe Negron, a Stuart Republican who carried the bill, but she criticized the substance of the legislation and the fact that much of the negotiations over it were conducted in secret until the legislation popped up yesterday afternoon.

“For three or four people to sit down and come up with this legislation – I don’t think that is the right process,” she said.

But Negron disputed the criticism.

“There’s no unanswered questions. There are no mysteries,” he said.

Negron said the measure is designed to improve care, save money and crack down on fraud. He also said the Legislature learned the lessons of former Gov. Jeb Bush’s Medicaid experiment in Broward County and the Jacksonville area, where large Medicaid providers pulled out and disrupted service.

Now, if that happens, the HMO would be fined up to $500,000 and wouldn’t be able to do business in Florida.

“We learned from that. We made sure that won’t ever happen again,” Negron said. He said Medicaid reform is a chance to transform the state’s health system and make it more “entrepreneurial” instead of a case of “government on high.”

The changes, which take place in 2012, aren’t guaranteed. The feds pay for more than half the program and have a final say. Last week, the federal government advised the state to use a medical loss ratio that would guarantee a certain amount of healthcare spending on patients. But the Legislature decided against a medical loss ratio in favor of a profit-sharing model.

Sen. Eleanor Sobel, D-Hollywood, said that was a bad idea. She said medical-loss ratios are well understood. Profit sharing isn’t. She feared Medicaid recipients would get less treatment while HMOs get more profit.

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